The holodeck is to be used for fun, pleasure, or to practice scenarios without fear of harm or consequences.
He played to Picard’s heart in asking for a way to be made human, but the next time he was brought back in “Ship In A Bottle” tried to make it happen for himself.
This led to Moriarty being created in “Elementary, Dear Data” and quickly learned he was not a living being of equal standing.
He was ultimately thwarted but lies dormant within the Enterprise memory banks still plotting his next act of revenge against whoever wakes him again.